Target on ODA disbursement ‘is within reach'

Vietnam is on track to fulfill its target of attracting 32-34
billion USD in Official Development Assistance (ODA) and preferential
loans during the 2011-15 period, along with capital disbursement of
14-16 billion USD.

The statement was made by Deputy
Minister of Planning and Investment Cao Viet Sinh, who added, " Vietnam
has disbursed more than 7.8 billion USD during the past two years."

This year the country targets to disburse about 4.5
billion USD, raising the total amount of ODA disbursement during 2011-13
to 12.3 billion USD, he noted.

"It means that the
country needs to disburse between 1.6-3.6 billion USD in the next two
years to fulfill the target," he said.

During the
past 20 years, donors' ODA commitments to Vietnam reached about 76.2
billion USD, while total ODA disbursement during the period was
estimated at 36 billion USD, according to the General Statistics Office.

The European Union and its member states alone have pledged 965
million USD in ODA for Vietnam this year, said Franz Jessen, head of
the Delegation of the European Union to Vietnam at a press briefing in
Hanoi on June 18.

The EU had allocated
development assistance to sectors where Vietnam is seeking
progressive reforms to maximise synergies between Government policies
and development assistance programmes, said Jessen.

"Bilateral assistance allocated to Vietnam will trigger and drive
policy reform in a wide range of sectors such as the rule of law, public
finance management and the health sector," he said.

To ensure the ODA target is within reach, Prime Minister Nguyen Tan
Dung in April asked for comprehensive measures to attract, manage and
use ODA more efficiently.

The PM asked relevant
ministries, sectors and localities to cooperate with the National
Steering Committee for ODA and Preferential Loans to review and assess
the implementation of ODA-funded projects and programmes and have
measures to promptly tackle difficulties for projects with sluggish
disbursement.

However, Deputy Minister Sinh admitted
that challenges remain for Vietnam in ODA disbursement, including
difficulties relating to ODA-related mechanisms and policies,
differences in procedures between Vietnam and donors, the lack of
corresponding capital and land clearance for ODA projects.

Asian Development Bank (ADB) Country Director for Vietnam Tomoyuki
Kimura said that since 1993, the ADB has approved over 100 loan-funded
projects, half of which have been completed. A post-project evaluation
suggested that with a 90 percent success rate, most ADB projects have
been successful.

However, the ADB director said many of these projects faced significant implementation delays.

In addition, Vietnam is forecast to face more challenges as it is
now a middle-income country, which means that attracting high levels of
ODA will become increasingly difficult.

Sinh said
some donors have changed their official development cooperation models
with Vietnam to focus more on cooperation between partners while some
donors may stop providing ODA for Vietnam in the coming years.

"That requires the country to have appropriate measures to attract and
improve the efficient use of this capital source to meet investment
development and ensure ability to pay foreign debts," he said.

Kimura said the type of ODA projects, as well as availability of the funds in Vietnam, are quickly changing.

"Concessional assistance is becoming increasingly scarce and Vietnam
will eventually have to graduate from it. Therefore, it is essential
for Vietnam to make sure that limited ODA funds are allocated where most
value can be added and utilised efficiently," he said.

To ensure efficient use of ODA, Sinh said the ministry has worked with
relevant ministries, agencies and donors to carry out a number of
measures, including finalising ODA management mechanisms and policies
and increasing guidance and support for project owners to deal with
difficulties.

Work has also been carried out to
review and assess the implementation of ODA projects to ensure timely
measures to tackle the shortcomings of troublesome projects, he said.

As a donor, ADB urged the Government to better ensure
project readiness and make sure that projects in the pipeline are only
approved once they have achieved a high degree of total project
readiness, said Kimura.

"Key to this is professional
capacities of Project Management Units (PMUs), where key staff
including project directors, chief accountants and procurement officers
should be members of permanent units that provide staff with attractive
career paths and monetary and non-monetary incentives to perform well,"
he said.-VNA